Ethical Dilemmas: Conflict of Interest Line Is Clear When Experience Goes Beyond 'Minor and Isolated Services'

Feb. 20, 2013 – Ethical dilemmas affect every lawyer’s practice. This series of questions and answers appears each month in InsideTrack. The answers, offered by State Bar’s Ethics Counsel org tpierce wisbar Timothy Pierce, provide guidance only and are not legal authority. Each situation will depend on the facts and circumstances involved.

Question

Our firm hired a new litigation associate. The associate recently left another small law firm in the same city. We jointly reviewed our firm’s client list to identify any potential conflicts of interest. The associate noted that our firm represents Smith in a suit against Mercantile Bank alleging racially discriminatory lending practices. The associate’s former firm is general counsel for Mercantile and handles all of its litigation matters including the Smith suit. When asked to describe her work for Mercantile at her former firm, the associate answered:

“I worked on a dozen or more files for the bank over the four years I was with the firm, all under the supervision of partners. Three of the files related to claims of discrimination in hiring and/or promotion and two or three related to racial discrimination in lending practices. I also researched and drafted a memorandum regarding business and lending practices for avoiding discrimination claims that was submitted to the bank about three years ago. I do not, however, recall working on any matter relating to anyone named Smith.”

We hired the associate with the understanding she will not work on the Smith matter. Subsequently, her former law firm brought a motion to disqualify our firm in the Smith suit. Must we withdraw?

Tim Pierce is ethics counsel with the State Bar of Wisconsin. He can be reached at org tpierce wisbar wisbar tpierce org, or by phone at (608) 250-6168.

Answer

Yes. The firm has a conflict and must withdraw. The associate has a former client conflict and that conflict is imputed to the whole firm. Some case law recognizes the use of timely screens to defeat disqualification, but SCR 20:1.10 allows for the use of screens to defeat imputation of conflicts only in limited circumstances, wherein the affected lawyer has performed only “minor and isolated services” for the former client. These limited circumstances do not apply to the facts as given here.